Conservation Law Found. v. Shell Oil Co.

Decision Date16 September 2022
Docket NumberCiv. 3:21CV00933(SALM)
PartiesCONSERVATION LAW FOUNDATION, INC. v. SHELL OIL COMPANY, et al.
CourtU.S. District Court — District of Connecticut

RULING ON MOTION TO DISMISS [DOC. #50]

HON SARAH A. L. MERRIAM, UNITED STATES DISTRICT JUDGE

Plaintiff Conservation Law Foundation, Inc. (plaintiff or “CLF”) brings this citizen enforcement action pursuant to the Clean Water Act and the Resource Conservation and Recovery Act. See Doc. #47. Plaintiff proceeds pursuant to an Amended Complaint, asserting fourteen counts against defendants Shell Oil Company, Equilon Enterprises LLC d/b/a Shell Oil Products US, Shell Petroleum Inc., Triton Terminaling LLC, and Motiva Enterprises LLC (collectively defendants). See generally Doc #47.[1] Plaintiff seeks declaratory and injunctive relief, as well as the imposition of civil penalties to “remedy” defendants' alleged violations of federal law, including:

(1) Shell's past and ongoing failures to comply with Connecticut Industrial Stormwater Permit ... and the Clean Water Act; (2) the Shell facility's location in a floodplain and improperly managed susceptibility to washout of solid waste, which poses a hazard to human life, wildlife and land and water resources; (3) Shell's past and present contribution to handling, storage, treatment, transportation, or disposal of solid and hazardous wastes, which may present an imminent and substantial endangerment to health or the environment in violation of RCRA; and (4) Shell's failure to operate and maintain its facility to minimize the possibility of a fire, explosion, or any unplanned release of hazardous waste or hazardous waste constituents to air, soil, or surface water which could threaten human health or the environment.

Doc. #47 at 1-2, ¶1. Plaintiff alleges that the above-described “violations of federal law have occurred and are occurring at Shell's New Haven Terminal, formerly the Motiva Enterprises LLC New Haven Terminal, a bulk storage and fuel terminal[.] Id. at 2, ¶2.

Defendants have filed a motion seeking to dismiss most of the Amended Complaint, along with a supporting memorandum. See Docs. #50, #50-1. Defendants seek dismissal of “all Causes of Action in the Complaint[] as to defendants Shell Oil Company, Shell Petroleum, Inc., and Motiva Enterprises LLC. Doc. #50 at 1 (sic). Defendants also seek dismissal of “Causes of Action 1-9 and 12-14” as to defendants Equilon Enterprises LLC d/b/a Shell Oil Products U.S. and Triton Terminaling LLC. Id. Plaintiff has filed an opposition to defendants' motion to dismiss, see Doc. #53, to which defendants have filed a reply. See Doc. #59.[2]

For the reasons stated below, defendants' Motion to Dismiss [Doc. #50] is GRANTED, in part, and DENIED, in part.

I. FACTUAL BACKGROUND

For purposes of deciding the motion to dismiss, the Court presumes the following factual allegations made in the Amended Complaint [Doc. #47] to be true.

The allegations of the Amended Complaint focus on “a bulk storage and fuel terminal located at” the Port of New Haven, Connecticut (hereinafter the “Terminal”), id. at 2, ¶2, which Defendants own and operate[.] Id. at 14, ¶67; see also id. at 21, ¶106. The Port of New Haven sits on the banks of the New Haven Harbor and “is the highest volume commercial shipping port on the Long Island Sound[.]" Id. at 33, ¶¶170-71 (citation and quotation marks omitted). [P]etroleum products arrive at the Terminal dock by tanker ship[,] and are transferred to aboveground storage tanks. Id. at 21-22, ¶113. Due to the impacts of climate change, the Port of New Haven “is at substantial risk of flooding from severe weather events.” Id. at 34, ¶173.

The Terminal is operated “pursuant to the General Permit for Discharge of Stormwater Associated with Industrial Activity issued by” the Connecticut Department of Energy and Environmental Protection (the “Permit”). Doc. #47 at 35, ¶175. The Permit “applies to stormwater discharges from industrial activity at any facility that registers for coverage under the” Permit. Id. at 35, ¶178 (citation and quotation marks omitted). “The Permit requires Shell to implement ‘Control Measures' to guard against the risks of pollutant discharges in the stormwater.” Id. at 38, ¶192; see also id. at 38-41, ¶¶193-200 (describing the control measures required under the Permit). “The Permit requires the permittee to develop a Stormwater Pollution Prevention Plan, or SWPPP[.] Id. at 41, ¶201; see also id. at 41-43, ¶¶202-07 (describing the elements required to be included in the SWPPP).

The Permit requires that the SWPPP be amended within 120 days of certain events, including: (A) when there is a change at the site which has an effect on the potential to cause pollution of the surface waters of the state and (F) when necessary to address any significant sources or potential sources of pollution identified as a result of any inspection of visual monitoring.

Id. at 43, ¶208 (citation and quotation marks omitted).

The Terminal is also regulated under the Resource Conservation and Recovery Act as a “Small Quantity Generator” of hazardous waste. Id. at 28, ¶144; see also id. at 28, ¶143. “The soil and groundwater within the Terminal are contaminated[,] because of “various chemical spills [that] have occurred on the site since at least the 1970s.” Id. at 29, ¶¶148-49. Remediation activities continue to the present day. See id. at 29, ¶150.

Plaintiff ... is a ... nonprofit, member-supported organization dedicated to the conservation and protection of New England's public health, environment, and natural resources.” Doc. #47 at 3, ¶9. Plaintiff “has long worked to protect the health of New England's waterways, including addressing the significant water quality impacts of industrial and stormwater pollution.” Id. Plaintiff's “members live near, recreate on, and regularly visit the area and waters near Shell's Terminal[.] ... [Plaintiff's] members use and enjoy these waters for recreational and aesthetic purposes, including, but not limited to boating, swimming, fishing, observing wildlife, and sightseeing; they intend to continue to engage in these activities in the future.” Id. at 4, ¶10.

Plaintiff names five defendants and describes their corporate relationships at length in the Amended Complaint. See generally Doc. #47 at 5-14. Non-party Shell plc “is a holding company and the ultimate parent company of a number of separate companies, engaged in the oil and gas business around the world, often referred to as the Shell group.” Id. at 5, ¶17. Defendant Shell Petroleum, Inc., is a holding company with no employees and “is the ultimate United States parent of Shell group entities that conduct exploration and production, trading, refining, marketing, and retail operations in the United States.” Id. at 6, ¶19; see also id. at 6, ¶21.

Defendant “Shell Oil Company is wholly owned by Shell Petroleum, Inc. and is an indirect subsidiary of Shell plc. Id. at 6, ¶23. “Shell Oil Company is Shell plc's primary operating subsidiary in the United States[] and “has the power to direct or cause the direction of the management or policies of Defendant Equilon Enterprises LLC and Defendant Triton Terminaling, LLC.” Id. at 6, ¶¶24-25.

Defendant Equilon Enterprises LLC (“Equilon”) is an indirect subsidiary of Shell Oil Company and Shell plc doing business as “Shell Business Products US.” Id. at 6, ¶¶26-27. Equilon holds the Permit and is an operator of the Terminal. See id. at 7, ¶¶28-29. Defendant Triton Terminaling LLC (“Triton”) is also an indirect subsidiary of Shell Oil Company and Shell plc. See id. at 7, ¶30. Triton became an owner of the Terminal in 2017, and is also an operator of the Terminal. See id. at 7, ¶¶31-32.

Defendant Motiva Enterprises LLC (“Motiva”) owned the Terminal between 2000 and 2017. See id. at 7, ¶34. “Motiva was formed in 1988 as a joint venture between Shell Oil Company, Texaco Inc., and the Saudi Arabian Oil Company. In 2002, Shell Oil Company took over Texaco's interest in Motiva. In 2017, Motiva was dissolved and Shell maintained control over its assets in the Northeastern region of the United States, including ownership of the Terminal.” Id. at 7, ¶¶35-36.

“Shell plc sets climate change policies and strategies for the entire Shell group of companies[,] including “policies for managing and mitigating climate risks to facilities owned by companies in the Shell group.” Doc. #47 at 8-9, ¶¶42-43. “Compliance with Shell's climate change policies and strategies is mandatory for each Defendant.” Id. at 10, ¶51. “Shell plc holds Shell Oil Company accountable for ensuring Shell Oil Company's subsidiaries implement Shell's climate change policies and strategies. Shell Oil Company exercises control over Triton and Equilon to ensure implementation of Shell plc's climate change policies and strategies.” Id. at 11, ¶¶55-56; see also id. at 12-13, ¶¶60-66 (describing the “Control Framework that specifies the standards for health, safety, security, environment and social performance ... and the scope for applying these standards for all entities in the Shell group[]).

Plaintiff asserts the following causes of action against all defendants: (1) Violation of the Clean Water Act - Failure to Eliminate Non-Stormwater Discharges; (2) Violation of the Clean Water Act - Activity Inconsistent with the Coastal Management Act and Causing Adverse Impacts to Coastal Resources; (3) Violation of the Clean Water Act - Unlawful Certification of SWPPP; (4) Violation of the Clean Water Act - Failure to Identify Potential Pollution Sources; (5) Violation of the Clean Water Act - Failure to Describe and Implement Practices to Reduce Pollutants and Ensure Permit Compliance; (6) Violation of the Clean Water Act - Failure to Implement Measures...

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